HMO Compliance: Watch out! You might have to spend £10,000 bringing your HMO up to a licensable standard!
If you have read any of the previous Relo blog posts on HMO compliance you might remember one specifically on the rules of licensing of HMO properties, however that might all be set to change in the future! The government have announced their intention to expand the mandatory HMO licensing scheme, with the changes due to come into force in 2017, subject to parliamentary approval. This idea would see the removal of the current three-storey rule, meaning every property which more than three people, irrelevant of number of floors, would potentially be subject to HMO licensing and therefore bring all unlicensed properties to licensable standard in terms of fire regulations which obviously has a large cost associated with it.
Intended HMO compliance measures include:
Ensuring mandatory licensing rules apply to all shared homes with five or more people from two or more households, and to flats above and below shops and other business premises. Currently licensing only kicks in for homes with three or more floors and excludes homes attached to businesses, unless they are in a three-storey building.Requiring landlords of shared homes to provide decent storage and disposal of rubbish.Tightening up the ‘fit and proper person’ test for landlords and ensuring criminal record checks are carried out to weed out rogues.
Where a landlord fails to obtain a licence, they will be liable to pay a potentially unlimited fine. Housing and planning minister Gavin Barwell said: “In order to build a country that truly works for everyone we must ensure that everyone has somewhere safe and secure to live.
“These measures will give councils the powers they need to tackle poor-quality rental homes in their area.
“By driving out rogue landlords that flout the rules of business, we are raising standards and giving tenants the protection they need.”
It is estimated that the new measures would bring a further 174,000 HMOs into the scope of mandatory licensing by as early as next year.
There would be a grace period of six months to give landlords time to comply and local authorities time to process licences.
As well as launching a new consultation on its proposals, the Government has also published its response to an earlier consultation on extending mandatory licensing of HMOs.
David Cox, managing director of ARLA, immediately hit out at the new proposals.
He said: “Landlord licensing doesn’t work.
“Councils already have a wide variety of powers to prosecute for poor property conditions and bad management practices, with penalties ranging from fines to seizure of property and even imprisonment.
“But councils don’t have the resources to undertake effective enforcement action. Imposing more burdens on councils will not mean improved standards and better conditions for tenants – it will merely mean more laws that are not being enforced.
“Further, we have to consider the unintended consequences of minimum room sizes.
“Some people are happy to take small rooms to keep their costs down. If these rooms are no longer available, where are people supposed to live?
“What’s more, if a small room in a property can no longer be let out, the costs of that room will be spread across the other tenants living in the property; pushing up their rents.
It looks like if these changes are to be made then they would be brought in in late 2017. Be warned as this could mean a costly upgrade for landlords with currently unlicensable properties as they will need to retro fit the correct regulations and could easily cost up to £10,000 doing the works required.
Watch this space for more information as we get it!